MUMBAI: The Directorate General of Safeguards (DGS) has sought clarifications from Hindustan Unilever on the methodology used to arrive at Rs 119 crore that the company offered to the government after it could not pass the entire benefits of GST.

"DG Safeguards has sought some further clarifications on methodology and requested some supporting documents pertaining to the earlier issue in response to earlier communication with us. We are in the process of submitting those clarifications," said an HUL spokesperson.

Since the past two months, DGS, the investigation arm of the revenue department, has been checking to make sure companies are passing on the benefits of lower levies under the goods and services tax (GST) regime to consumers. In November, the GST Council dropped tax rates on 200 products, including chocolates, toothpaste, shampoo, washing powder and shaving creams, to 18% from 28%.

During its quarterly earnings announcement last month, HUL said after this revision that rate reductions couldn't be effected on some of the products in the pipeline and an estimated Rs119 crore for the month of November and December was disclosed to the Central Board of Excise and Customs with an agreement to pay the amount suo moto to the government. "The amount for January is in progress and will be shared in due course of time," the spokesperson added.

The company has not recognised the amount as revenue and is holding it as liability in its books.

A recent Allahabad high court judgment may, however, provide some relief with the court ruling that there shall be no tax levied in case of purchases made at duty free stores at the arrival or departure terminals.